PhD-Interoperability, Decentralized Governance and Incentive Mechanisms for Blockchains in Decentralized Finance and Web3
PhD @Loughborough University posted 14 hours agoJob Description
Project details
Decentralized Finance (DeFi) and Web3 are reshaping the digital economy by eliminating intermediaries, enhancing transparency, and enabling user-driven financial ecosystems. DeFi revolutionizes traditional financial services (e.g., lending, borrowing, trading, asset
management) by removing reliance on centralized institutions, ensuring permissionless access, lower transaction costs, and improved financial inclusion.
Meanwhile, Web3 represents the next phase of the internet, shifting control from corporations to individuals through decentralized applications (dApps), self-sovereign identities, and tokenized economies. By integrating DeFi within Web3, users can gain direct ownership of assets, secure transactions, and automated financial interactions. In this regard, blockchain is regarded is the key enabling technology of DeFi and Web3, providing the necessary security, decentralization, and transparency for these ecosystems with the following features: i) smart contracts to automate financial transactions without intermediaries; ii) decentralized
consensus mechanisms ensuring the network integrity; ii) interoperability facilitating seamless asset transfers, liquidity and usability across different platforms; iii) decentralized identity and data ownership allowing users to retain control over their personal data and reducing reliance on the centralized entities; v) tokenization and digital assets facilitating decentralized governance and programmable financial instruments.
By integrating blockchains into DeFi and Web3 applications, financial systems can become more resilient, accessible, and efficient, paving the way for autonomous, user-driven digital economies. However, despite its transformative potential, blockchains faces several
challenges in their interoperability, decentralized governance and incentive mechanisms, which directly impact their scalability, security, and user adoption in DeFi and Web3.
1) Interoperability: in DeFi and Web3, interoperability, i.e., ability of users to communicate and exchange assets seamlessly across different blockchain networks, is crucial for crosschain transactions, liquidity sharing, and dApps operating across multiple ecosystems.
Interoperability challenges include i) fragmentation of protocols due to distinct consensus mechanisms, smart contract languages, and transaction formats, making seamless interaction difficult; ii) security risks in cross-chain bridges that have been frequent targets of exploits, leading to significant financial losses; iii) standardization issues: lack of universal standards for cross-chain transactions; iv) scalability: interoperability often introduces additional computational overheads, affecting transaction speeds and efficiency.
2) Decentralized governance is necessary to ensure that DeFi and Web3 applications in blockchain protocols are managed by their communities rather than centralized entities, e.g., through mechanisms like decentralized autonomous organizations (DAOs) to democratize decision-making. Yet, several challenges persist: i) voter apathy and plutocracy: DAO models rely on token-based voting, which can lead to disproportionate influence by large stakeholders while discouraging participation from smaller users; ii) smart contract vulnerabilities, if poorly designed, can be exploited to manipulate decision making; iii) coordination complexity among different blockchains, leading to high overheads.
3) Incentive mechanisms are essential for increasing user participation, security, and sustainability in DeFi and Web3 ecosystems. However, designing effective incentives faces several challenges: i) economic sustainability: most DeFi protocols rely on token rewards that can lead to inflationary pressures and unsustainable economic models; ii) game-theoretic exploits: malicious actors can manipulate incentive structures, e.g., liquidity mining or staking rewards, to extract values without contributing to the ecosystem; iii) fairness and accessibility to ensure equitable distribution of incentives among participants, including small users, remains a challenge; iv) long-term viability: majority of incentive provisioning methods focus on short-term gains rather than fostering long-term engagement and protocol stability. Accordingly, the proposed research will tackle these challenges by exploring the design of novel protocols, smart contracts, security and privacy provisioning methods, and Layer 1 and 2 solutions for blockchains in DeFi and Web3.
94% of Loughborough’s research impact is rated world-leading or internationally excellent. REF 2021
Supervisors
Primary supervisor:Â Dr. Alia Asheralieva
Entry requirements
Our entry requirements are listed using standard UK undergraduate degree classifications i.e. first-class honours, upper second-class honours and lower second-class honours.
Entry requirements for United Kingdom
Applicants should have, or expect to achieve, at least a 2:1 Honours degree (or equivalent) in a related degree. Applicants should also have:
– An excellent knowledge of computer networks (including communication protocols), systems (including distributed systems) and cyber security;
– An excellent knowledge of numerical methods, mathematical optimization, distributed algorithms (some knowledge of game theory is also required);
– Good programming skills.
English language requirements
Applicants must meet the minimum English language requirements. Further details are available on the International website.
Fees and funding
Tuition fees for 2025-26 entry
UK fee
£5,006 Full-time degree per annum
International fee
£28,600 Full-time degree per annum
Fees for the 2025-26 academic year apply to projects starting in October 2025, January 2026, April 2026 and July 2026.
Tuition fees cover the cost of your teaching, assessment and operating University facilities such as the library, IT equipment and other support services. University fees and charges can be paid in advance and there are several methods of payment, including online payments and payment by instalment. Fees are reviewed annually and are likely to increase to take into account inflationary pressures.
How to apply
All applications should be made online. Under programme name, select Computer Science. Please quote the advertised reference number: CO/AL-SF3/2025 in your application.
To avoid delays in processing your application, please ensure that you submit a CV and the minimum supporting documents.
The following selection criteria will be used by academic schools to help them make a decision on your application. Please note that this criteria is used for both funded and selffunded projects.
Please note, applications for this project are considered on an ongoing basis once submitted and the project may be withdrawn prior to the application deadline, if a suitable candidate is chosen for the project.
